There are many participants in a sale transaction, each having a very specific and purposeful role in the transaction. Below we have outlined some of the participants and their roles in a sale transaction.
The Buyer(s)
- Tenders a written offer to purchase (or accepts the Seller’s counter-offer) accompanied by a good faith deposit amount.
- Applies for a new loan, completing all required forms and often prepaying certain fees such as credit report and appraisal costs.
- Approves and signs the escrow instructions and other related instruments required to complete the transaction.
- Approves and signs new loan documents and fulfills any remaining conditions contained in the contract, lender’s instructions
and/or the escrow instructions. - Deposits funds necessary to close the escrow. Approves any changes by signing amendments in the escrow instructions.
- Determines which hazard (fire) insurance agent to use to satisfy requirements to the lender.
The Seller(s)
- Accepts Buyer’s Offer to Purchase and initial good faith deposit to open escrow.
- Submits documents and information to escrow holder, such as: addresses of lien holders, tax receipts, equipment warranties,
home warranty contracts, any leases and/or rental agreements. - Approves and signs the escrow instructions, grant deed and other related documents required to complete the transaction.
- Orders inspections, receives clearances and approves final reports and/or repairs to the property as required by the terms of
the purchase and sale agreement (Deposit Receipt). - Fulfills any remaining conditions specified in the contract and/or escrow instructions; approves the pay off demands and / or
beneficiary’s statements. - Approves any final changes by signing amendments to the escrow instructions or contract.
The Lender (When Applicable)
- Accepts the new loan application and other related documents from the Buyer(s) and begins the qualification process.
- Orders and reviews the property appraisal, credit report, verification of employment, verification of deposit(s), preliminary
report and other related information. - Submits the entire package to the loan committee and/or underwriters for approval.
- When approved, loan conditions and title insurance requirements are established.
- Informs Buyer(s) of loan approval terms, commitment expiration date and provides a good faith estimate of the closing costs.
- Sends Buyer(s) the required closing disclosure in advance of closing.
- Deposits the new loan documents and instructions with the escrow holder for Buyer’s approval and signature.
- Reviews and approves the executed loan package and coordinates the loan funding with the escrow officer.
The Escrow Officer
- Receives an order for escrow and title services. Orders the preliminary report on the subject property.
- Acts as the impartial “stakeholder” or depository, in a fiduciary capacity.
- Prepares the escrow instructions and required documents in accordance with terms of the sale.
- With authorization from the real estate agent or principal, orders demands on existing deeds of trust and liens or judgements.
- Presents the documents, statements, loan package(s), estimated closing statements and other related documents to the
principal(s) for approval and signature. - Receives the proceeds of the loan(s) from the lender(s).
- Records the deed, deed of trust and other documents required to complete the transaction with the County Recorder.
- Orders the title insurance policies.
- Closes the escrow by preparing the final settlement statements, disbursing the proceeds to the Seller, paying off the existing
encumbrances and other obligations.
Fidelity National Title
- Receives an order for title service.
- Examines the public records affected and issues a preliminary report.
- Determines the requirements and documents to complete the transaction and advises the officer and/or agents.
- Reviews and approves the signed documents, and the order for title insurance, prior to the date.
- When authorized by the escrow officer, records signed documents with the County Recorder and issues the title insurance
policies.
